Accounting, Auditing and Reporting: Supporting or Obstructing the Sustainable Companies Objective?

Abstract

In this Chapter, the authors explore the role of accounting, reporting and auditing in responding to sustainability. The Chapter focuses on the reporting and auditing requirements regarding the impact of corporate activity on the environment. As there is a strong and well-established corporate financial accounting culture all over the world, only few jurisdictions appear to be more advanced in sustainability accounting. Whilst recognition of the potential relevance of accounting to improvement of environmental performance might indicate that accounting and reporting could improve sustainable corporate behaviour, these mechanisms may also hinder such improvements. The Chapter explores the barriers and possibilities for improved sustainability through accounting and reporting as well as related audit and other assurance processes. Through its cross-jurisdictional analysis, the Chapter identifies a more progressive role for sustainability related reporting and auditing. The Chapter begins with a discussion of the conceptual considerations of accounting and sustainability, including the role of accountants and accounting as a process related to capitalism. After that, the Chapter provides an overview and summary of the accounting requirements across the jurisdictions represented in the Sustainable Companies Project. Reference is also made to recent developments at the European level with legislation to require non-financial disclosure. In the end, suggestions for future reforms are offered with particular attention paid to the concept of integrated reporting.